Subject: FW: International GST [DLM=For-Official-Use-Only]
[SEC=UNCLASSIFIED]
From: Warren Bolton [mailto:me@warrenbolton.com]
Sent: Tuesday, 7 November 2017 9:07 AM
To: Purcell, Jonathan
Subject: RE: International GST [DLM=For-Official-Use-Only]
Hi Officer
I have now had an opportunity to review the information addressed in your references and I have a couple more enquiries if that is okay
i.e. goods means any form of tangible personal property.
however, there is no definition of “services’ in this section.
Is ‘services’ defined elsewhere in the legislation?
Can you confirm that I have interpreted this correctly and that
at present if you import a physical goods into Australia that GST is not
payable on goods below $1000 in value?
3.
I
seek some clarity in relation to section 9-25(5)(d).
a. Firstly, Section 9-25 is headed ‘Supplies connected with the indirect
tax zone’.
“indirect
tax zone” means (with some minor modification)
Australia.
Therefore,
this Section is to do with an activity involving a ‘supply’ that involve the
territorial area of ‘Australia’.
Can you confirm that this is correct?
b.
Further
Subsection (5) is headed “Supplies of anything else “and starts with the
statement “A supply of anything other than goods or *real property”……..
Why does “real property” not constitute a subset of “goods” as
defined within the meaning of the term in Division 195?
Further by this statement therefore , “anything” is everything
except ‘goods’ or ‘real property’.
BUT in the ‘Explanatory Memorandum’ under the Glossary of terms appears an
‘abbreviation’ titled ‘intangibles’ and the ‘definition’ is “things
other than goods or real property”
It appears that ‘anything’ and ‘intangibles’ the same entity,
and if so why do we have two term that mean the same thing?
Paragraph (d) of Subsection (5) provides
that an intangible is connected with Australia (indirect
tax zone) if the recipient
of the supply is an ‘Australian consumer’.
Australian
consumer has the meaning given by subsection 9-25(7) and affected by section
84-100.
Subsection
(7) provides an ‘Australian consumer’ is an ‘Australian resident’ (with some
minor modification)
Section
84-100 defines the circumstances where an ‘entity’ is not an Australian
resident.
Section 9-25(5)(d) by it plain reading
does not address the question I asked (See Below). This section however advises
that the supply of ‘anything’ is connected to Australia, merely
if the recipient is an ‘Australian citizen’.
It does not provide the head of power of
legislative authority to make that Australian citizen responsible to pay GST.
That authority must be located somewhere else?
Finally,
if this is the section that provides the head of power to charge an Australian
citizen GST on ‘anything’ merely because of their citizenship status then this
section as crafted is fatally flawed because as the ATO has advised (GSTR
2017/1) ‘… an Australian resident receiving a haircut from a hairdresser in
Germany is not required to pay GST for this service’
Section 9-25(5)(d) cannot be the full explanation to my Question
No 1!
4.
I have reviewed the Bill No.2016 supporting material ‘Explanatory Memorandum’ and ‘ Supplementary Explanatory Memorandum’ that
passed through Parliament when the changes to the act were made. I have not
been able to find in that document any reference to enforcement but I do
understand that enforcement is a policy matter. I have therefore have taken the
opportunity to review ATO’s advice in relation to enforcement and I have the
following questions:
a.
Where
in the legislation provides the Australian Taxation Office with the judicial
power to enter a business premises in Vietnam; China; North Korea; or Russia
for the purposes of inspecting records to determine whether or not businesses
based in those countries, providing services or intangibles to
Australian residents, have been collecting the required taxation?
b.
Can you please tell me the legal
facility that the Australian Taxation Office possesses to require a
non-Australian business located in any of the above countries to appear in an
Australian court to answer the charge of acting in breach of Australian GST
law?
c.
I see in your documentation that it
is the intention of the Australian Taxation Office to trawl the Internet to
determine who might be a non-Australian businesses
providing goods and services to Australian residents that are the subject of
the application of the GST. Does the Australian Taxation Office intend to use
any other mechanism to try and locate non-Australian businesses that the
Australian Taxation Office has determined are required to achieve compliance
with Australian legislation or is the intention of the ATO to rely solely on
voluntarily assistance of only major non-Australian businesses providing global
services online?
d.
Does the Goods and Services Act make
it an offence for a business to collect GST from an Australian citizen when
there is no onus under the legislation to collect such tax. For Example: If a
business charges a customer GST on vegetables ( a non
GST item) and collect the GST from that customer is that business committing an
offence?
e.
Can you please tell me the section
of the act that would appear on any summons issued to a
non-Australian businesses for a breach of Australian GST law for failing
to collect GST on a supply of ‘anything’ to an Australian residents.
5.
One last question. If I determined
to purchase American government bonds and have the documentation held in a
secure safety deposit box within an American financial institution does the
current Australian GST law require me to pay GST on the hire charges of that
security box?
Thanks for your continued assistance.
Warren Bolton
04 293949 04